 "HDFC Bank")
HDFC Bank Q4FY24 results preview: India's largest private sector lender, HDFC Bank, will report its January-March quarter results on Saturday, April 20. Analysts, on their part, expect a decent pick up in the bank's profitability given sales proceeds from Credila stake sale and healthy deposit growth.
"Balance sheet management is improving as provisional numbers for Q4FY24 suggested that deposit accretion was strong at 7.5 per cent quarter-on-quarter (Q-o-Q) while loan-deposit ratio (LDR) fell by 610bps Q-o-Q to 104 per cent due to lower loan growth at 1.6 per cent Q-o-Q," said analysts at Prabhudas Lilladher in their result preview report.
While core earnings growth would be muted for FY24E (4.5 per cent Y-o-Y), as net interest margin (NIM) improves in FY26, core PAT may enhance by 19 per cent Y-o-Y, the brokerage added.
Analysts have assessed the numbers on a quarterly basis as year-on-year numbers are not comparable due to the merger of HDFC Bank with erstwhile HDFC Ltd on July 1, 2023.
Meanwhile, on the bourses, the stock price of HDFC Bank has tumbled 12.5 per cent on the BSE so far in the current calendar year (CY24) as against a nearly unchanged S&P BSE Sensex index.
Here's what key brokerages expect from HDFC Bank's Q4FY24 results:
Nomura
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According to the Japan-based brokerage, HDFC Bank's net profit may grow 40 per cent Q-o-Q to Rs 23,000 crore during the quarter under review, largely driven by Credila stake sale. Its core PAT, however, may dip 9 per cent sequentially to 14,880 crore.
Operationally, the brokerage forecasts flat net interest income (NII) at Rs 28,600 crore in Q4FY24, with pre-provision operating profit (PPoP) down 3 per cent on quarter to Rs 22,900 crore.
The brokerage expects NIM to compress 5 basis points (5bps) Q-o-Q to 3.4 per cent.
BNP Paribas
This brokerage has pegged HDFC Bank's net profit at Rs 16,089.6 crore, down 1.7 per cent Q-o-Q, while PPoP is seen at Rs 24,303.6 crore, up 2.8 per cent Q-o-Q.
HDFC Bank had reported a net profit of Rs 16,372.5 crore in Q3FY24, and Rs 12,047.5 crore in Q4FY24 (un-merged entity).
NII, on the other hand, was Rs 28,471.3 crore in the December quarter of FY24, and Rs 23,351.8 crore for Q4FY23 (un-merged entity).
Prabhudas Lilladher
Loan growth, the brokerage said, would be 1.6 per cent Q-o-Q led by retail and CRB portfolio. While NII could grow by 2.5 per cent Q-o-Q to Rs 29,184.3 crore , NIM may decline by 12bps due to sharp decline in LDR Q-o-Q.
Gross non-performing assets (GNPAs) could remain stable at 1.25 per cent, while provisions might moderate due to likely write-back in AIF provisions. Provisions are pegged at Rs 3,000 crore in Q4FY24, down 29 per cent sequentially from Rs 4,216.6 crore.
Kotak Institutional Equities
The brokerage expects HDFC Bank to see better traction on deposit growth in Q4FY24 (seasonally strong as well). It is building around 7 per cent Q-o-Q deposit growth, and 3 per cent Q-o-Q loan growth, leading to an improvement in the LDR.
KIE expects flat NIM, while non-interest income will likely get a boost from the stake sale of the education finance subsidiary Credila, it added.
Overall, NII is pegged at Rs 29,435.3 crore (up 3.4 per cent Q-o-Q), Treasury income at Rs 5,937 crore (up 304 per cent Q-o-Q), PPoP at Rs 28,889.3 crore (up 22.2 per cent Q-o-Q), and net profit at Rs 20,018.6 crore (up 22.3 per cent Q-o-Q).
Phillip Capital
This brokerage estimates NII to rise 3.1 per cent over the December quarter to Rs 29,368 crore, while PPoP and net profit are seen increasing 1.6 per cent and 2.7 per cent sequentially to Rs 24,019.8 crore and Rs 16,815.8 crore, respectively.
GNPA, in absolute terms, is seen at Rs 30,212 crore, with GNPA ratio at 1.2 per cent. Similarly, for NNPA, the value is projected at Rs 7,714.4 crore with NNPA ratio at 0.3 per cent.
It sees slippages rising 7 per cent Q-o-Q to Rs 7,500 crore vs Rs 7,000 crore in Q3FY24.
